Kazakhstan: Legendary Almaty Bazaar Going Upmarket

The markets of Barakholka are undergoing a transformation, turning many of the old container shops and wooden-table stands into modern, glass-and-steel malls. (Photos: Joanna Lillis)

Shoppers thronged Barakholka bazaar in Kazakhstan’s commercial capital, Almaty, on a recent summer’s afternoon, browsing for bargains in the shipping containers from which traders ply their wares.

It looked like business as usual at this giant bazaar, which consists of dozens of adjoining markets doing a brisk trade in anything from furniture to fur coats, from carpets to car parts. Rows of metal containers are interspersed with garbage-strewn lots, sprawling for around eight kilometers along a traffic-choked highway. Most of the goods for sale are imported from neighboring China.

Yet the burned-out shell of one market stands as testament to recent troubles. The market was gutted in one of several mysterious fires which have set traders muttering darkly about a turf war over lucrative retail pickings in Central Asia’s richest city.

“This is a really bad situation,” Lidiya Milyavskaya, who was plying accessories imported from Turkey from one container, told EurasiaNet.org. “We’ve got used to trading at Barakholka,” she says – but, like all traders here, she may soon be out of business. Evictions have begun, to make way for upscale development propelled by a city hall intent on gentrification.

Sellers have been evicted from several markets in recent weeks as redevelopment that has been on the agenda for two years gathers pace. If developers’ dreams come true, glitzy malls will spring up in this dystopian spot.

City hall wants to spruce up a trading spot that sprang up haphazardly in the 1990s as a flea market, acquiring the nickname Barakholka (Russian for “junk market”), but has now turned into a giant bazaar which by 2010 had annual sales of $1.7 billion, according to a World Bank study, making it the second largest market in Central Asia.

Budget-conscious shoppers see Barakholka as a lifeline in an expensive town, but the image-conscious local authorities see it as an eyesore in a city of gleaming skyscrapers – especially as Almaty seeks to wow the world with a bid to host the 2022 Winter Olympics.

Underscoring the importance of the bazaar issue for Kazakhstani authorities, President Nursultan Nazarbayev intervened personally on August 6, instructing the government to curtail the shadow economy by closing down “uncontrolled” bazaars and promoting “organized” shopping malls. He included a proviso that existing traders’ businesses should not be damaged by the changes.

Sixteen of Barakholka’s 60 or so markets have already been demolished, city hall said last month. Construction workers are swarming over sites that will be transformed into modern retail spaces, with the first due to open in September.

Almaty’s mayor, Akhmetzhan Yesimov, is leading the charge against Barakholka, citing a litany of complaints from health and safety concerns to claims that the market is a haven for tax dodgers, illegal labor migrants, and contraband goods.

“A lot of the issues in Barakholka are endemic in the Kazakhstani economy,” Dena Sholk, a Fulbright scholar from Georgetown University conducting research at Barakholka, told EurasiaNet.org.

Bringing the gray economy out of the shadows depends “on the effectiveness of state institutions, which requires institutional reform,” she argues.

While traders acknowledge a grain of truth in Yesimov’s complaints, many sellers whose livelihoods are threatened see them as a smokescreen to provide ammunition to demolish Barakholka.

Conspiracy theorists point to a spate of suspicious blazes that have gutted several markets as evidence of a dirty-tricks campaign to scare them out.

“I think when people refused to leave, another way was chosen to drive them out,” clothes seller Tomiris told EurasiaNet.org, declining to give her surname out of fear of repercussions.

Official ownership of the Barakholka markets is murky, and traders are reluctant to name names. Some believe Bolat Nazarbayev, the president’s businessman brother, has interests there, speculation on which he has not commented.

Angered by resistance to city hall’s redevelopment plans, in November Yesimov threatened to unmask the “very well-known” businessmen who own the various bazaars – but he never followed up with revelations (nor explained why the ownership is shrouded in secrecy).

City officials deny plans to demolish Barakholka altogether. The aim is to solve the gridlock on the highway through the bazaar and build “modern shopping centers,” Almaty’s deputy chief architect Zhanat Aytleuov said on August 4.

Yet many traders at Barakholka – which employs an estimated 180,000 people – believe soaring rents at the ritzy malls replacing the makeshift markets will drive them out of business. Since they rent rather than own their trading spots, they will not receive compensation.

“It will be fine if the rents are OK,” handbag seller Mukhit Iskhanov said wryly. “But it will probably be expensive.”

Iskhanov pays around $500 a month to rent the shipping container that serves as his shop, plus bazaar administration fees of about $350 – far below prices for retail space elsewhere in Almaty.

As incomes rise and the status-conscious middle class embraces retail therapy, Kazakhstan is in the grip of a retail boom which has seen sales more than quadruple over a decade, to $27 billion last year.

The government’s campaign to drive shoppers out of bazaars and into malls, which it deems vital for “the civilized development of trade,” is bearing fruit: formal trade overtook informal trade in 2011, and last year bazaars and informal outlets accounted for 47 percent of sales.

Gentrification is not restricted to Barakholka: Almaty authorities are targeting 73 markets for demolition or relocation – but some see the drive as misplaced.

“The question of civilizing trade is a bigger question than just removing bazaars,” says Sholk.

“If you take Barakholka away, and traders have to work in malls with higher overhead costs, this will really, really hurt a lot of consumers and overall consumption numbers,” she adds. “A lot of consumers need Barakholka.”